KARACHI: Advisor to Prime Minister on Institutional Reforms and Austerity Dr. Ishrat Hussain has stressed that Pakistan, instead of staying confined to exporting textiles only, needs to diversify its exports and move towards the sunrise industries for which the global demand is expanding in double digits otherwise we will remain stuck to US$25 to US$30 billion exports.
Speaking at the second session of webinar organized by the Karachi Chamber of Commerce & Industry (KCCI) to develop national consensus on economic agenda, Ishrat Hussain said, “If we can capture just 1 percent of Chinese market by providing components, raw materials, intermediate goods to Chinese supply chain, we can get $23 billion exports to China which is very favorably inclined towards Pakistan and they have allowed a lot of room through the FTA.”
“We are not taking advantage of the Chinese market which is so close to us and we are only focused on chasing the European Union and United States where rates of growth are either negative or 1 to 2 percent while China and Asia are growing by 5 to 6 percent and China has become the largest single exporter in the world”, he added.
PM’s Advisor further said, “We have to create incentive structure not only for five export-oriented sectors but also for any new sectors which are coming to start up the business and start up the new ventures and if they want to go for exports, we should try to provide them the financing, we should provide them tax rebates and we should give them the same treatment being given to five export-oriented sectors.”
“We have to diversify our incentive structure in order to encourage the new comers, new industries, new businesses and startups particularly in the IT sector which has huge potential”, he added.
He further pointed out that Pakistan has a very low investment and very low saving rate as 15 percent of investment can only result in 3 to 4 percent of growth rate but if the investment rate goes to 20 percent, the growth rate would improve to 5 percent. “We are a consumption led economy and no consumption led economy would ever be able to grow hence we have focus on savings and investment.”, he said while quoting the example of China where saving rates are 50 percent and investment rates are 45 percent and they are actually exporting capital to rest of the world including the United States.
He further stressed that the Pakistani industries must focus on improving their productively level which was very low as compared to other countries around the world and also a reason for high cost of doing business.
Dr. Ishrat Hussain said that Prime Minister was very keen to listen to and resolve the problems being faced by the business and industrial community so he has practically been meeting the business community almost every month.
Chairman BMG Zubair Motiwala, in his remarks, requested the government and political parties to please segregate politics and businesses that is the need of the hour. “Stop politicizing businesses as whenever the businesses are politicized, they don’t bring fruits to anywhere. The economies that have made remarkable progress, have actually done this by completely segregating politics and businesses.”
He was of the opinion that frequent changes in policies kill the economy hence, the business, taxation, industrial, trade policies must be kept intact at least for a period of five years.
